Yesterday we reported on the Law Society update about changes to Nationwide’s lender panel. The Building Society has informed the Law Society that it will be suspending those firms that have performed less than four transactions for Nationwide in the last year, subject to an appeals process that has been put in place by Nationwide.
To appeal the decision any firm must be a member of the Conveyancing Quality Scheme (CQS). They must also be able to demonstrate one of two criteria. The first is that the transaction figures for Nationwide are not representative of the conveyancing activity of the firm. The second is that the firm has low conveyancing transaction figures but that it meets a particular need that it is important for the local or national market to keep.
Nationwide has carried out a mapping exercise to make sure that no areas are left without any firms on the panel, and are also carrying out data collection to make sure that their records are accurate. Firms will be able to provide the information requested by Nationwide for this purpose electronically.
In the long term Nationwide told the Law Society that it aims to reopen its lender panel membership. It also stated that when this happens membership of the CQS would be a requirement for new applicants.
The Law Society argues that using transaction numbers to decide if a firm should stay on a lending panel is too blunt, and that a better and more sensible solution would be for lenders to work collectively with the Law Society. It believes that the CQS could be used as a data sharing solution. This would then stop firms giving the same information to all its lender panels.
Nationwide confirms to us that it is suspending those firms with what it describes as none or very little contact with the Society. It confirms that this is less than four cases in the last year. This is as the Society wants to make sure its panel of Solicitors is up to date, manageable and active.
It is also argued by Nationwide that firms’ conveyancing skills and effective systems are less likely to be kept up to date if they do not keep active in the area.
A representative for Nationwide did not put a figure on the number of firms affected by this change, but said that it represents only 0.3% of the conveyancing transactions carried out by the Society over the last year.
Nationwide said of the appeals process that an appeals panel meets to discuss any cases where a firm has appealed against suspension from the panel. It confirms that a firm will need to supply details so that the Society can understand the business, and that any appealing firm must demonstrate that the low volumes of transactions for Nationwide are not representative of its volumes overall, or that it meets a wider public good.
CQS membership seems to becoming more important in the conveyancing market, as lenders begin to use it as a requirement for new members. Using transaction figures to trim lending panels may seem arbitrary but the number of transactions needed to be on the panel is one every quarter. This is a very low figure. Firms that are doing only one transaction a quarter on average may struggle to show the criteria needed to appeal suspension.
Today’s Conveyancer, bringing you the latest conveyancing news and updates.